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Gambling company GVC Holdings is facing a shareholder backlash over what has been described as an “excessively disproportionate” pay to the company’s CEO, Kenny Alexander, The Guardian reports.
Mr. Alexander has been at GVC’s helm since 2007. He has concluded two important acquisition deals during the past two and a half years. GVC first acquired fellow online gambling operator bwin.party Digital Entertainment in February 2016 in a £1.1-billion deal. Earlier this year, his company acquired British bookmaker Ladbrokes Coral for £3.2 billion to extend its footprint across the UK retail market. Prior to that second acquisition, GVC had operated solely in the online gambling space.
It was understood that Mr. Alexander has received £45 million worth of share options since 2016. In addition, GVC’s Chairman, Larry Feldman, has been awarded over £22.5 million worth of share options over the same period. GVC’s shares reached an all-time high of £10.26 this past Friday.
During last year’s annual general meeting of the gambling company, over 45% of its investors voted down its pay policy which awarded Mr. Alexander £19.4 million for 2016. The executive’s pay totaled £18 million for 2017. It, too, is expected to be snubbed by shareholders at the upcoming AGM, slated to take place June 6 in Gibraltar.
Advisors Encourage Investors to Vote Down the Pay Report
Shareholder advice bodies Glass Lewis and Pirc have urged shareholders to vote against the company’s pay policy, calling Mr. Alexander’s pay “excessively disproportionate”, particularly given the fact that it represents around 550 times what average GVC employees are paid.
Luke Hildyard from remuneration think tank High Pay Centre has said that he found it outrageous that GVC has retained its pay policy, despite last year’s protest vote from shareholders. He went on to say that the company has apparently been disregarding investors’ strong objection to its 2016 remuneration report and has decided to maintain the same pay approach for 2017, which would probably be met with even stronger negative reactions from shareholders.
Generally speaking, such shareholder votes are advisory and a company is not obligated to change its policies, even though it is facing a backlash from its investors.
While GVC has not commented on the matter publicly, but it is believed that the company has told its shareholders that its remuneration report was the way it was due to the fact that its share price has increased significantly with Mr. Alexander and Mr. Feldman at its helm.
Last week, GVC upgraded its cost synergies forecast following the acquisition of Ladbrokes Coral to £130 million from an original estimate of £100 million. Mr. Alexander explained that the anticipated savings were for the first three years after the creation of the enlarged group and that he was “confident of delivering shareholder value”, even though it has been just two months since the deal was closed.
The post GVC Shareholders Rage Against CEO’s “Excessively Disproportionate” Pay appeared first on Casino News Daily.
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